What is a fixed rate home loan?
A fixed rate home loan means your loan repayments will be charged at the same interest rate for however long the fixed rate period is. This rate is commonly for a period between 1 – 5 years, but longer fixed rate terms do exist. After this period, the rate will revert to a variable rate, unless you enter into another fixed-term contract.
While historically variable rate loans have been more popular in Australia, fixed-rate loans have become increasingly popular with the fall in official cash rate.